Month: November 2016

UNITED NATIONS: The United Nations Security Council imposed new sanctions on North Korea on Wednesday aimed at cutting the Asian country’s annual export revenue by a quarter in response to Pyongyang’s fifth and largest nuclear test in September.

The 15-member council unanimously adopted a resolution to slash North Korea’s biggest export, coal, by about 60 percent with an annual sales cap of US$ 400.9 million or 7.5 million metric tonnes, whichever is lower.

The U.S.-drafted resolution also bans copper, nickel, silver and zinc exports and the sale of statues by Pyongyang.

The United States was realistic about what the new sanctions on North Korea – also known as the Democratic People’s Republic of Korea (DPRK) – will achieve, the U.S. Ambassador to the United Nations, Samantha Power, told the council after the vote.

“No resolution in New York will likely, tomorrow, persuade Pyongyang to cease its relentless pursuit of nuclear weapons. But this resolution imposes unprecedented costs on the DPRK regime for defying this Council’s demands,” she said.

“In total, this resolution will slash by at least US$ 800 million per year the hard currency that the DPRK has to fund its prohibited weapons programs, which constitutes a full 25 percent of the DPRK’s entire export revenues,” Power said.

North Korea has been under U.N. sanctions since 2006 over its nuclear and ballistic missile tests. It conducted its latest nuclear test on Sept. 9.

“Sanctions are only as effective as their implementation,” U.N. Secretary-General Ban Ki-moon told the council. “It is incumbent on all member states of the United Nations to make every effort to ensure that these sanctions are fully implemented.”

China, believed to be the only country buying North Korean coal, would slash its imports by some US$ 700 million compared with 2015 sales under the new sanctions, diplomats said.

Over the first 10 months of 2016, China imported 18.6 million tonnes of coal from North Korea, up almost 13 percent from a year earlier. North Korean exports to the end of 2016 will now be capped at US$ 53.5 million, or 1 million metric tonnes.

While China said it was opposed to North Korea’s nuclear tests, U.N. Ambassador Liu Jieyi accused the United States and South Korea of intensifying confrontation with North Korea by scaling up military exercises and presence.

He described the planned U.S. deployment of a Terminal High Altitude Area Defense (THAAD) anti-missile system in South Korea as “neither conducive to the realization of the goal of de-nuclearization of the Korean peninsula nor helpful to the maintenance of peace and stability on the peninsula.”

The U.N. resolution blacklisted 11 more individuals, including former ambassadors to Egypt and Myanmar, and 10 entities, subjecting them to a global travel ban and asset freeze for ties to North Korea’s nuclear and missile programs.

It calls on U.N. states to reduce the number of staff at North Korea’s foreign missions and requires countries to limit the number of bank accounts to one per North Korean diplomatic mission amid concerns that Pyongyang had used its diplomats and foreign missions to engage in illicit activities.

SINGAPORE: Tackling national reconciliation and peace issues is “unavoidable” and a must for Myanmar, said State Counsellor Aung San Suu Kyi on Wednesday (Nov 30).

Speaking at a dialogue with Singapore officials and business leaders as part of her three-day visit to the city-state, Ms Suu Kyi noted that firms do not like to invest in countries which are unstable, and as such a measure of stability is needed to draw businesses.

“We do not want our country to be unstable, but we have had a long history of disunity within our nation. So national reconciliation and peace is unavoidably important for us. It’s not a matter of choice. It’s unavoidable. We have to achieve peace and national reconciliation so that our country may be able to progress,” Ms Suu Kyi said.

She said the challenge, however, is huge, and economics has a role to play in reaching that goal. Ms Suu Kyi said prosperity can help people to understand that in unity, the country can progress together.

“If we wish to be a strong and prosperous nation, we have to learn to give, to compromise. To engage in dialogue. And this is, I think, where business can teach us, even on the political front. Doing business means compromise. Doing business means engaging. Doing business means listening to one another,” she said.

Ms Suu Kyi assured businesses that Myanmar’s Investment Law is intended to be business-friendly, and will provide the security that companies wish to see. She added that Myanmar is open to feedback from investors on the country’s rules and regulations.

TOKYO: Japan-Singapore ties go “beyond politics and economics”, Japanese Emperor Akihito said on Wednesday (Nov 30), as the two countries celebrate 50 years of bilateral relations.

The Emperor and Empress Michiko held a state banquet on Wednesday evening to welcome Singapore President Tony Tan Keng Yam, who is on a state visit to Japan.

The second day of his visit kicked off with an audience with Emperor Akihito and Empress Michiko at the Imperial Palace. Dr Tan, along with his wife Mrs Mary Tan, inspected the guard of honour with the emperor and empress.

Singapore’s President Tony Tan Keng Yam bows to national flags of Singapore and Japan as he reviews the guard of honour during the welcome ceremony at the Imperial Palace in Tokyo on Nov 30, 2016. (Photo: AFP / Kimimasa Mayama)

Prime Minister Shinzo Abe and his wife Akie Abe were also at the palace to greet President Tan.

In the evening, the royal couple hosted a six-course French banquet for the Singapore delegation. There were about 140 guests, including envoys, businessmen and politicians.

The emperor noted that Singapore has grown exponentially since his first visit in 1970.

“Every time we visited Singapore since then, we witnessed the dramatic progress that you made in the intervening years. Now more than half a century since Singapore’s independence, you have succeeded in creating a beautiful, affluent nation,” he said.

Emperor Akihito also offered his condolences over the deaths of Mr Lee Kuan Yew and former President S R Nathan, referring to them as “two figures who led Singapore in its early years” and fostering friendly ties with Japan.

During the banquet, President Tan toasted to “robust and growing ties” with Japan.

President and Emperor Akihito exchanging a toast during the State Banquet. (Photo: Facebook/Dr Tony Tan/MCI)

“Singapore and Japan share many common interests and work closely together in regional and multilateral fora to address issues of mutual interest and to tackle shared challenges,” said Dr Tan.

On Thursday, Dr Tan and Prime Minister Shinzo Abe will witness the signing of several agreements, including on educational exchanges and research cooperation.

Both leaders will discuss areas of cooperation between Singapore and Japan. They will also talk about regional developments and discuss ways to strengthen ASEAN’s relationship with Japan.

Japan is Singapore’s second biggest foreign investor behind the United States, while Singapore is Japan’s largest Asian investor.

SEOUL: South Korean President Park Geun-hye will not respond to prosecutors’ request to question her, her lawyer said on Monday, amid a deepening political crisis over a scandal involving her old friend accused of meddling in state affairs.

The lawyer, Yoo Yeong-ha, said in a statement she had to deal with the “fast-moving situation” and so there was little time for Park to cooperate with prosecutors, who had asked to question her by Tuesday.

SINGAPORE: Singapore’s gross domestic product (GDP) for the third quarter may have performed better than initially expected, but analysts see little evidence that is sustainable.

Announced by the Ministry of Trade and Industry (MTI) on Thursday (Nov 24), both the year-on-year and quarter-on-quarter figures came in better than last month’s flash estimates, but were notably worse than the second-quarter’s growth numbers.

This slowing rate of GDP growth is expected to continue amid headwinds such as stubbornly weak external demand, and economists have begun tapering their forecasts for the local economy.

“The 1.1 per cent (year-on-year growth in GDP) is nearly half of the second quarter’s growth rate. The economy is slowing for sure,” Ms Krystal Tan, an Asia economist from research firm Capital Economics, told Channel NewsAsia. “Going forward, Singapore’s economy is likely to see weak growth rates of 1-ish per cent and that is nothing to be happy about.”

The souring economic picture seems to have put a dent on household spending, noted UOB economist Francis Tan, referring to the meagre growth of 0.6 per cent in private consumption expenditure for the third quarter. That marked the slowest growth in private consumption expenditure since the sustained slowdown started in the fourth quarter of 2015, and could be a result of weaker real wage growth and less-tight labour market.

“Faced with the onset of poorer economic prospects and job market, weaker consumer confidence had resulted in a collective ‘tightening your belt’ situation amongst residents,” Mr Tan wrote in a note.

As the dark clouds continue to gather on the horizon, where is the economy headed?

Q: Are we about to enter a technical recession?

Over the July to September quarter, the city-state’s economy shrank 2 per cent from the previous three months on an annualised and seasonally adjusted basis. Another quarter-on-quarter contraction in the final three months of 2016 would put Singapore in a technical recession.

In response to media queries, the MTI on Thursday said the likelihood of a technical recession in the upcoming quarter is “unlikely”, with growth support coming from electronics, IT and other services industries.

However, economists are split when it comes to how Singapore’s economy will fare in the fourth quarter.

HSBC’s Joseph Incalcaterra, for one, expects a technical rebound in sequential growth in the final quarter, primarily due to relief from a favourable base effect. Meanwhile, Ms Tan from Capital Economics put the odds of a technical recession next quarter at “less than 50 per cent”.

“It’s not our base case scenario at this point,” she said. “There are signs that the economy may be stabilising, such as loan growth and the manufacturing sector did end the third quarter on a stronger note after improvements in September. Also, broadly speaking, we don’t see global growth collapsing.”

Nonetheless, there are economists who are taking a more cautious stance.

Citigroup’s Kit Wei Zheng said that a fourth-quarter technical recession “cannot be ruled out” after indicators, such as the 12 per cent year-on-year plunge in October’s non-oil domestic exports, indicated that economic weakness has persisted into the fourth quarter.

Mr Rajiv Biswas, the chief economist for Asia Pacific at IHS Global Insight, said there is a 30 per cent chance that the Singapore economy could see another quarter-on-quarter contraction. The sustainability of manufacturing growth and whether the services sector could pull itself out of the rut following three straight quarters of sequential contraction will be key factors, he added.

“However, even if Singapore does avert a technical recession, the momentum of economic growth in the first three quarters has been very close to what may be described as economic stagnation even though it was not a technical recession,” he said.

Q: Going into 2017, what are the prospects for the Singapore economy?

The MTI on Thursday described the economy’s growth outlook for 2017 as “modest”, while adding that it expects GDP to come in between 1 to 3 per cent.

Similarly, many economists said that downside risks to growth remain high moving forward.

HSBC’s Joseph Incalcaterra expects most sectors in Singapore to see a “deceleration in activity” into next year, setting the stage for weak growth in 2017. “Momentum in the Singapore economy continues to decelerate alongside weakening global trade, and we see downside risks on the horizon stemming from policy uncertainty in the US and European Union.”

Citi’s Mr Kit is more pessimistic. “For 2017, we remain wary of competitiveness drags on exports, tighter credit conditions for companies, and a weakening jobs market weighing on household balance sheets, which could bring growth below 1 per cent,” he wrote in a note.

According to economists that Channel NewsAsia spoke to, estimates for 2017 full-year GDP growth range from 0.9 per cent to 1.8 per cent.

US President-elect Donald Trump, who campaigned on a protectionist stance, is seen as a further risk to Singapore’s economy. (Photo: AFP/Mandel Ngan)

Q: Donald Trump – the key risk factor to watch out for?

Apart from longstanding headwinds such as weak external demand and a slowdown in major trading partner China that has dampened the fortunes of Singapore’s trade-reliant economy, uncertainties have been intensified in recent months due to shocks stemming from Brexit and the victory of American mogul Donald Trump.

Commenting on what a Trump administration means for Singapore, Mr Biswas said that if the President-elect’s policies such as cutting corporate tax rates can boost US GDP growth in the near term, Singapore’s export-driven economy will inevitably get a lift.

However, significant uncertainties about Trump’s other policies remain. “One downside risk could be if the US applies significant countervailing tariff measures against key Asian economies such as China. If China is hit by significant US defensive countervailing tariff measures to combat perceived unfair trade practices, it could result in a further slowdown in China’s export sector, which could have negative transmission effects on Singapore’s economy,” Mr Biswas explained.

An added risk could come in the form of faster-than-expected interest-rate hikes by the US Federal Reserve, alongside Trump’s policies to boost fiscal spending.

With domestic interest rates in Singapore being tied closely to US rates, quicker hikes by the Fed will likely increase debt servicing burdens, while negatively impacting the housing market as well as construction activities. These impact will be unwelcomed at a time when Singapore’s economic growth is already faltering, said Ms Tan from Capital Economics.

SINGAPORE: The impact of China’s One Belt One Road initiative on ASEAN economies and China-ASEAN ties was the focus of discussions at the Global Diaspora Business Summit on Monday (Nov 28).

Silk Road Chamber of International Commerce (SRCIC) chairman Lu Jianzhong, a keynote speaker at the summit, said China’s close relationship with Southeast Asia dates back to more than 2,000 years ago. The region has always been an important trade route, with Singapore being the focal point, he said.

Launched in December last year, SRCIC is a non-governmental organisation comprising chambers of commerce from countries situated along the historical Silk Road. It is one of the main forces promoting the One Belt, One Road initiative and currently has 55 country members.

The summit included presentations on the chamber’s own projects such as the Silk Road International Development Fund and eSilkRoad, an online platform that aims to connect business associations and companies so that information and capital flows can move easily between countries along the route.

More than 150 delegates were present, including country representatives from Georgia, Nepal and Kazakhstan, and business organisations like the Singapore Manufacturing Federation.

SINGAPORE: Serviced residence operator Ascott has unveiled its newest accommodation concept, Lyf, which is “designed for and managed by millennials who wish to experience destinations as locals do”, it announced on Thursday (Nov 24).

In a press release, Ascott said the properties will be designed to facilitate interaction between guests, with communal spaces and co-working areas that can be easily transformed into zones for workshops or social gatherings.

“Each Lyf properly has its own unique personality with fun and quirky design elements”, it said, adding that interactive digital art pieces or giant ball pits may be incorporated “for the kids amongst us”.

Ascott said millennials already form a quarter of its customers and it expects this segment to grow exponentially. Said Ascott’s chief executive officer Lee Chee Koon: “Lyf is a unique accommodation tailored for this demographic, including technopreneurs, start-ups and individuals from music, media and fashion.”

A common kitchen area, under Ascott’s new Lyf brand. (Photo: Ascott)

Millennials are defined as those aged 18 to 34, according to Pew research published in 2016. However, Ascott said the brand does not define millennials by age, but as “a social generation who crave discoveries and desire to be part of a community.”

The properties will be managed by “Lyf Guards” – millennials who may be residents themselves, but also perform the role of community manager, city and food guide, as well as bar keeper, explained Ascott.

A common laundry area, under Ascott’s new Lyf brand. (Photo: Ascott)

Ascott said it aims to have 10,000 units under the Lyf brand globally by 2020, adding that it is looking out for sites in Australia, France, Germany, Indonesia, Japan, Malaysia, Singapore, Thailand and the United Kingdom.

It said the types of accommodation will include studio apartments and twin rooms with a shared kitchen.

SINGAPORE: Singapore needs to diversify its relationships under the current global climate of uncertainty, and to do this, it has to be as connected as possible to different regions of the world and not wait to seize opportunities, said Deputy Prime Minister Tharman Shanmugaratnam on Friday (Nov 25).

Speaking to his Russian counterpart Igor Shuvalov and more than 200 delegates at the Russia Singapore Business Forum, Mr Tharman said that with a cloud of uncertainty looming over the globe, there is no sure way to tell who will become winners or losers.

He noted that the mood of the most advanced countries towards openness and everything global is “now more in question than has been for a long time”.

But for Singapore, the best course of action is for businesses and people to remain as connected as possible to the outside world, he said.

“Particularly when you’re talking about a small country like Singapore, we have to focus even more on developing the strengths that can make us relevant to the rest of the world. So that even with uncertainty, even with some regions going down, even with a less business-friendly environment, we are still relevant,” Mr Tharman stated.

Speaking in Russian, Mr Shuvalov said that being open to businesses is also a key theme for his country. He noted that Russia’s economy has been going through tough times, but there are bright sparks, like the banking and insurance sectors, which have seen growth.

For Russia, Mr Shuvalov said the long-term vision is not for the economy to be fully directed by the government. Rather, he said authorities want to give as much freedom as possible to entrepreneurs, so as to foster a business-friendly environment.

Given similar interests held by the two countries, both leaders have agreed to work towards ratifying the Eurasian Economic Union and Singapore free trade deal by 2018.

Turning to Singapore’s next development phase, Mr Tharman said a key gap identified is the connection between research and enterprise, which can be further strengthened.

“Publishing something in the most advanced journal doesn’t change the world,” he said. “It doesn’t add value, it doesn’t add to incomes. What changes the world is converting research to something that’s available in the market.”

Mr Tharman said commercialisation of research is a priority for Singapore, and this will require the right incentives for researchers and the appropriate intellectual property rules.

He also said his ministry had nothing to do with her detention. “The Home Ministry is only involved in policy matters. When it comes to operational matters on which offence is being committed and which act is being used, it’s up to the police,” he said.

“Her offence has got nothing to do with Bersih 5, the demonstration itself, but it’s got to do with the police report that was filed at a police station in the capital.”

Maria is being investigated for alleged activities detrimental to parliamentary democracy.

She was arrested on Friday, a day before the mass demonstration to call for governmental reform and transparency in the wake of a corruption scandal surrounding Malaysian Prime Minister Najib Razak.

The controversial Special Offences Special Measures Act 2012 (SOSMA) has been evoked to detain her without trial for up to 28 days.

When it was first introduced, SOSMA was touted by authorities as anti-terror legislation, but critics said the detention without trial” provision violated human rights.

Meanwhile, supporters of Bersih’s leader are keeping up the pressure on authorities to release her. On Wednesday (Nov 23), more than 200 women from various groups walked to Malaysia’s Parliament House. An online petition to “Free Maria Chin” that went live on Monday has received more than 40,000 signatures, as of Wednesday afternoon.

Malaysia’s Deputy Home Minister also refuted allegations that the Bersih leader had been subjected to inhumane treatment while under detention. ““She is not being given unfair treatment, she is being given treatment which is equal to other suspects,” he said.

He added that she was also being given “round-the-clock” medical care and had a cell that was “clean and habitable in accordance with international standards”.

Malaysian police have come under criticism for alleged double standards – they’re potentially detaining Maria for up to 28 days while Jamal Yunos, a division leader from ruling party UMNO, was released on bail after four days.

Jamal was also picked up ahead of the Bersih rally and the counter-rally he organised for his pro-government Red Shirts movement.

“Jamal was detained under a different section because he organised the Red Shirts and he did not follow the proper laws to control public demonstrations, so he was detained under that act, not under SOSMA,” Nur Jazlan said.

“SOSMA isn’t used to detain people for demonstrations,” he added.

“It’s two different things. Although the timing is coincidental, both of their cases are based on two different things. Two different offences and two different acts.”